NASSCOM – BPO Strategy Summit 2009
Aligning BPO opportunities in the
domestic market
Rajiv Prakash
Director – Business Services & Strategy
Future Knowledge Services – Future Group
1
800 +
Stores,
50 +
Distribution
Centres
Future Group’s Consumption Business
70 +
cities
3 million +
articles
40
Supply
chains
15 +
Formats,
10
Categories
FY05 
FY08
6X revenue
growth
30,000 +
employees
25,000 +
vendors
Modern retail - still at a nascent stage in India
Future Knowledge Services (FKS) – created as a shared
network of business and technology services for the group
Retail Business’ Needs
Costs &
Capex
Resultant FKS design principles
 Long term, sustainable low cost model
 Capability to create capabilities
 Group sourcing hub
Controls &
Compliance
Consumer
Experience &
Revenues
Scale
 Open delivery model – captive or
outsource agnostic
 Leverage low legacy
 Architecture: Process – Technology
Integration, Open source, network centric
 Avoid mainstream locations –
Ahmedabad hub
 Provide talent the opportunity and
environment to create an unique and
valuable business
To create and deliver solutions that
will shape the consumption sector
3
Organisation Profile
•
Established in 2007
•
Leadership: deep experience in international and India retail technology
& business services and consulting – TESCO, KPMG, A S Watson and
Cisco
•
Organisation: 600+ members combining business services, technology
services and consulting – deep domain skills
•
Partnerships: SAP, Sun, Cisco, Wipro, Reflexis, JDA, Wincor,
Greenplum, Newgen
•
Delivery hub: Ahmedabad – over 60% of team. Centre located in the
midst of a 10 acre mall covering all key retail formats – a live training
centre and lab
•
Governance: Business – FKS Governance Council
4
This model has helped in the creation and delivery of
significant business capabilities across the value chain
Retail
Business
PLAN
BUY
MOVE
SELL
SERVICE
SUPPORT
FKS Delivery to Retail
Business
Benefits
Targeted
Costs /
Investments
Consumer
Experience
/ Revenues
Controls
Scale
Key FKS Retail Business Services and Technology Initiatives since 2008
• Finance & Accounting Shared Services
• Master Data Management Services
• Inventory Audit Services
• Space Optimisation Services
• Reporting & MIS Services
•Merchandise and Assortment Planning
• Promotions Management
• Time & Attendance Services
• Payroll Management Services
FKS
Capabilities
Business
Consulting
+
Technology
Design
+
• Vendor Relationship Management Platform
• Consumer Loyalty Programs
• Enterprise-wide Point of Sale Replacement
• SAP Platform ECC6
• Warehouse Management
• Store Management Platform
• Data Centre and Network Optimisation
• Open Source Office Applications
• Business as usual
Application
Development
Maintenance
+
Technology
Infrastructure
Management
+
Program
Management
+
Business
Process
Delivery
5
Our Business Services profile
Capability to deliver a complete business process as a service with accountability
for outcomes
• A full business capability as a service
• Integrates different capability components:
– Business solution and process design
– People
– Software application
– Infrastructure
• Integrates different service types:
– Transaction processing (Rule and decision based)
– Knowledge Services
– Contact management
– Audit and monitoring
• Processes can be digitised and/or physical, centralised and/or
decentralised
6
Capability 1 - Finance & Accounts Shared
Services
Scope &
Scale:
•
300 + person delivery centre in Ahmedabad serving Future Retail
•
10 + end to end Processes – Accounts Payable incl Payments, Accounts
Receivable, Reconciliations and Reporting
Model:
•
2 million + transactions annually
•
Not lift and drop but migration to a to-be, standardised process model
•
Full country transition from 200+ stores, warehouses and zones in 3 months
•
No workflow, physical mail-room as an interim solution
•
Transition managed by ex-finance department personnel
•
Talent model – local graduates, 60+ finance dept staff migrated to Ahmedabad, select
supervisory hires sourced nationally
Platform
creation:
Benefits:
•
Co-location of F&A Shared Services and Technology – SAP & Development teams
•
Cash management reporting and reconciliation
•
Petty cash automation
•
Invoice creation application on vendor collaboration platform
Stronger controls, Better compliance, Cost Reduction
7
Capability 2 : Inventory Audit Service
Scope:
• End to end delivery of physical stock-take process at the stores and
warehouses
• Computation of variances vis-à-vis book stocks, reconciliation and posting
• Shrinkage analytics and loss prevention advisory
Scale:
• 250 + stores, frequency - 3 times a year, night-shifts
• 150+ people on rolls, 200+ FTE sourced from stores
Model:
•
Organised as 7 national hubs serving 60+ locations
•
An example of technology, process, infrastructure and talent integration
•
FKS designed business and technology solution, process architecture and
SOPs
•
Team built through internal transfers – specialists and others
•
Technology integration: Inventory Audit Application created, SAP
integration achieved, HandHeld Terminal deployed for the first time
Benefits:
Accuracy, detection of frauds and defects, independence, stronger
controls
8
Capability 3 – Master Data Management Services
Scope &
Scale:
•
Employee, Customer, Article (Product) and Vendor masters
•
Initial focus on Article (Product) Master – 3 million articles, annual creation 500,000+
articles
•
Model:
Services:
- Article Lifecycle Management – Creation, Maintenance & Archival
- Meta-master management
- Legacy article cleanup
- Dimension and image capture
- Merchandise Hierarchy Mgmt
•FKS designed - Business and Technology Solution, Process architecture and
SOPs
•In-house designed MDM application with SAP integration – extensible across
multiple categories
•Specialised skills – for exception mgmt and other services
•Product dimension capture – a physical process
Benefits:
Clean, consistent, complete and rich master data and lighter database
9
Domestic services – some learnings & observations
• A different customer world – growth rates, scale, complexity, economics and
ambiguity
• Sourcing drivers differ from offshoring – operating model, controls, cost
model
• Not just process migration but often process creation and engineering
• No significant cost arbitrage – demonstrating value demands innovation
• No piecemeal solutions, demand for delivery of outcomes - hence
technology + process + skill integration often a must
• The immense value of low legacy
• A sandbox – innovate locally, scale globally
• Need for a domestic ecosystem – need to create and support an Indian
business services and platform product provider base
• Smaller and specialised partners are better
• The extra-ordinary potential of “ordinary people”
• Incentives for domestic services needed – significant employment creation
potential
10
Namaste